Should Britain create a sovereign wealth fund to help leave a positive legacy to future generations?
Many natural-resource-rich countries have chosen to invest a share of the money generated in a sovereign wealth fund for the benefit of their future citizens. There is a particularly strong intergenerational argument in favour of doing so, as a well-stewarded sovereign wealth fund enables future generations to share in the economic prosperity that exploiting natural resources creates even if the resources themselves are finite and will eventually run out. However, Britain has never opted to go down this path, despite the colossal bounty delivered by North Sea oil and gas revenues, as successive governments have chosen to spend the money they produce on current consumption instead.
All the while, Britain also racked up a huge national debt of over £1 trillion. Would it be fairest on future generations if we started investing in a fund for their benefit, or should we just concentrate on paying off these debts so that as little as possible is passed on to them?
This report investigates the history of sovereign wealth funds in different countries around the world, demonstrating that they are more common – and take a greater variety of forms – than many of us think, and it presents the arguments for and against a British sovereign wealth fund.